Should I incorporate my app in order to charge users?

[frabia]

I built an app in the past year, I gave it to a few friends to try and I would like to release it publicly. I added some term and conditions (created with some online tools) but I'm afraid of potential liabilities if I release it publicly, especially since I would like to start charging users soon.

How do I protect myself legally and limit responsibility? (though not sure what are the actual risks) Thanks for the clarifications

[davismwfl]

IANAL, so all that goes (and doesn't) with that.

Before I accept a clients money I always build a proper business around the project to box the liability and structure it as a business. This also helps me because there are real costs (minor but they exist) to doing it, and it forces me to see it as a real thing not just a side project etc.

If you accept money as an individual you become liable personally for any legal suits etc. At least as a business your personal life & assets (assuming you follow the business structure & rules) isn't really touchable by a disgruntled client. Of course, there are some points where you could still get sued personally even if you have a business but it likely wouldn't stick without extenuating circumstances that warrant it.

[tldrthelaw]

I am a lawyer, but I am not your lawyer and this isn't legal advice. Just advice to seek advice.

In short, the answer to your non-title question is "consult a lawyer." Incorporating (or forming an LLC) is not a silver bullet for insulating yourself from liability. At the risk of boring you with details, for the most part the law is logical and rational (please stop laughing, I'm serious). If you form an LLC but the LLC seems like it is just you (intermingling of funds, etc.) and you only formed it to avoid liability when your app goes haywire, it won't insulate you from liability.

tldr talk to a lawyer

[heymrli]

It really depends, I don't know what your product is but chances are it's pretty harmless. However, if your app offers services that are legally troublesome, for example an app that delivers cannabis or alcohol where age verification is an issue, yeah I might want to lawyer up there.

As a serial entrepreneur, my perspective is shoot first beg for forgiveness later. Honestly, nobody's going to sue you right now because you have an idea, you clearly don't have a real business setup, and you're not worth nearly as much as Google to sue. And when you end up having a million users, you have a great problem on your hands, you'll have enough money to hire lawyers anyway.

I'd recommend continuing to focus on finding your product market fit and actually getting customer stickiness before worrying about any of this.

We're a litigious society, but let's be real who's going to want to sue a budding entrepreneur. What could I possibly get from you. Wouldn't even be worth my legal fees.

I hope you don't take any of this the wrong way, just my two cents.

[brudgers]

The specifics matter. Like jurisdiction, what the app does, how much you charge, how the money is transferred from customers to you, etc.

Hire an attorney and accountant. They are experts.

If you cannot afford an attorney and accountant, then odds are that you don't have a viable business and it might be worth reconsidering.

Legal advice on the internet is free and worth less than double that price.

[QueensGambit]

IANAL. Not a safe advice, but done this in the past.

If your app is less than $100, don't waste time in incorporating. Just ask for money, because getting users to pay is harder than you imagine. Use your paypal account to collect money from the first 10 customers (Even personal account can be reasonably integrated in your app). If it works, then go ahead and incorporate.

[muzani]

Ask a lawyer. I did so recently and it was not as expensive as expected. They're usually happy to answer a yes/no question for free (and more accurately than strangers on the internet).

If you want a plan, that's where the costs come in. It's still not too expensive, often cheaper than hiring a programmer.

[lmarcos]

You could release it publicly for free for N months and see if people actually use it. If you see that enough people is using your app regularly, then you can start with the hassle of incorporation.

[soozzoos]

Hey we help people incorporate as well as get a tax id and bank account at Blook! Feel free to ask our team anything. Https://blook.io